Half-year Report

RNS Number : 6237P

Safeland PLC

21 November 2016

 

Safeland plc

("Safeland" or the "Company" or the "Group")

Interim Results

For the Six Months to 30 September 2016

Safeland (AIM: SAF), the property trading and investment company, announces its unaudited interim results for the six months ended 30 September 2016.

Highlights

Turnover: £1.9m (2015: £12.5m)

Loss before tax: £0.4m (2015: profit £4.3m)

Net asset value per share: 111.7p (30 September 2015: 110.7p, 31 March 2016: 114.0p)

Managing Director's Statement

I am pleased to report the Company's interim results for the 6 months to 30 September 2016. These results reflect transactional volatility that shareholders will be aware of, combined with the extraordinary market conditions which we find ourselves in.

During the period, the Company sold the second of two properties located in Golders Green and obtained a planning consent for its Muswell Hill hotel property for conversion into 18 flats ranging from 1-3 bedrooms. The hotel ceased operation in August 2016 and construction has commenced on site, with completion anticipated to take place in the second half of 2017.

An announcement was made in December 2015 regarding the purchase of a substantial house in Hampstead Garden Suburb for redevelopment. This is nearing completion and contracts have been exchanged for its sale with completion anticipated in the second half of this financial year.

Given the results for the 6 months ended 30 September 2016, the Directors do not declare the payment of an interim dividend (2015: 1.5p). 

Outlook

As previously stated, the market is constrained by the current economic and political outlook, which is creating a very cautious environment. We continue to pursue acquisition opportunities whilst continuing to add value to existing stock held through planning or development.

The Board is confident that it has the skills necessary to make selected acquisitions in the current market, but is being extremely selective until there is further clarity as to the general outlook.

 

For further information:

Safeland plc	[phone]
Larry Lipman, Managing Director
Stockdale Securities (Nominated Adviser and Broker)	[phone]
Tom Griffiths

For more information visit: www.safeland.co.uk

Condensed consolidated income statement	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
Revenue	1,898	12,453	21,116
Cost of sales	(1,462)	(7,497)	(14,003)
Gross profit	436	4,956	7,113
Administrative expenses	(858) )	(802)	(1,287)
Gain on revaluation of investment properties	-	-	42
Share of results of jointly controlled entity	-	-	(33)
Share of results of associate	12	12	23
Profit on sale of investment in joint venture	-	-	-
Dividend from investment	-	13	13
Profit on sale of investment property	-	-	-
Operating (loss)/profit	(410)	4,179	5,871
Finance income	273	256	520
Finance costs	(240)	(156)	(334)
(Loss)/profit before tax	(377)	4,279	6,057
Tax	-	(866)	(1,522)
Profit for the financial period attributable to owners of the parent company	(377)	3,413	4,535
Basic (loss)/earnings per share (note 2)	(2.42p)	20.24p	27.95p
Diluted (loss)/earnings per share (note 2)	(2.42p)	13.35p	15.45p

There is no difference between the diluted loss per share and the basic loss per share presented as the effect of the share options in issue is anti-dilutive.

The revenue and operating result for the periods are derived from continuing operations in the United Kingdom.

Condensed consolidated statement of comprehensive income	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
(Loss)/profit for the period	(377)	3,413	4,535
Other comprehensive income Fair value (losses)/gains on available for sale financial assets	(139)	(74)	(139)
Other comprehensive income for the year, net of tax	(139)	(74)	(139)
Total comprehensive (loss)/income for the period attributable to owners of the parent company	(516)	3,339	4,396

 

Condensed consolidated statement of financial position	Unaudited		Unaudited		Audited
	30 September		30 September		31 March
	2016		2015		2016
	£000		£000		£000
			Restated (notes 5 and 6)
Non-current assets
Property plant and equipment	1,855		1,935		1,904
Investment properties (note 5)	1,123		2,693		1,123
Investments in associate	133		135		121
Available-for-sale investments	692		897		832
Trade and other receivables	8,777		8,240		8,503
	12,580		13,900		12,483
Current assets
Trading properties (note 6)	14,464		9,684		14,838
Trade and other receivables	117		660		381
Cash and cash equivalents	1,540		2,865		2,988
	16,121		13,209		18,207
Total assets	28,701		27,109		30,690
Current liabilities
Bank loans and overdrafts (note 7)	-		-		-
Trade and other payables	285		1,124		495
Derivative financial instruments	-		-		-
Corporation tax payable	1,450		1,733		1,450
	1,735		2,857		1,945
Non-current liabilities
Bank loans (note 7)	9,664		6,385		10,927
Deferred income tax liabilities	72		-		72
	9,736		6,385		10,999
Total liabilities	11,471		9,242		12,944
Net assets	17,230		17,867		17,746
Equity
Share capital (note 8)	778		843		778
Share-based payment reserve	354		555		354
Investment revaluation reserve	(191)		13		(52)
Capital redemption reserve	65		-		65
Retained earnings	16,224		16,456		16,601
Total equity attributable to owners of the parent company	17,230		17,867		17,746
Condensed consolidated statement of cash flows	Unaudited	Unaudited		Audited
	Six months ended	Six months ended		Year ended
	30 September	30 September		31 March
	2016	2015		2016
	£000	£000		£000
Cash flows from operating activities
Cash generated/(utilised) from operations (note 4)	76	6,429		2,321
Interest paid	(240)	(156)		(292)
Corporation tax paid	-	(829)		(1,695)
Net cash generated/(utilised) from operating activities	(164)	5,444		334
Cash flows from investing activities
Interest received	-	-		1
Distributions from associate	-	-		25
Other dividends received	-			13
Purchase of property, plant and equipment	-	(98)		(105)
Purchase of available for sale investments	-	(664)		(664)
Proceeds from sale of investment properties	-	-		1,637
Proceeds from sale of property, plant and equipment	-	82		82
Net cash inflow/(outflow) from investing activities	-	(680)		989
Cash flows from financing activities
New loans	-	-		3,742
Purchase of own share capital	-	-		(743)
Dividends paid to equity shareholders	-	(295)		(529)
Loan repayments	(1,284)	(2,058)		(1,259)
Net cash inflow from financing activities	(1,284)	(2,353)		1,211
Net increase/(decrease) in cash and cash equivalents	(1,448)	2,411		2,534
Cash and cash equivalents at beginning of period	2,988	454		454
Cash and cash equivalents at end of period	1,540	2,865		2,988

Consolidated Statement of Changes in Equity

For the six months to 30 September 2016 (unaudited)

	Share Capital £'000	Share premium account £'000	Capital redemption reserve £'000	Share based payment reserve £'000	Revaluation Reserve £'000	Retained earnings £'000	Total equity £'000
Balance at 31 March  2016	778	-	65	354	(52)	16,601	17,746
Comprehensive income
Profit for the period	-	-	-	-		(377)	(377)
Revaluation of available-for-sale investments	-	-	-	-	(139)	-	(139)
Total comprehensive income	-	-		-	(139)	(377)	(516)
Transactions with owners
Purchase of own shares	-	-	-	-	-	-	-
Dividend paid	-	-	-	-	-	-	-
Share based payment charge for the period	-	-	-	-	-	-	-
Total transactions with owners	-	-	-	-	-	-	-
Balance at 30 September 2016	778	-	65	354	(191)	16,224	17,230

For the six months to 30 September 2015 (unaudited)

	Share Capital £'000	Share premium account £'000	Capital redemption reserve £'000	Share based payment reserve £'000	Revaluation Reserve £'000	Retained earnings £'000	Total equity £'000
Balance at 31 March 2015	843	-	-	486	87	13,338	14,754
Comprehensive income
Profit for the period	-	-	-	-	-	3,413	3,413
Revaluation of available-for-sale investments					(74)
Total comprehensive income					(74)	3,413
Transactions with owners
Purchase of own shares	-	-	-	-	-	-	-
Dividend paid	-	-	-	-	-	(295)	(295)
Share based payment charge for the period	-	-	-	69	-	-	69
Total transactions with owners	-	-	-	69	-	(295)	(226)
Balance at 30 September 2015	843	555	-	13	-	16,456	17,867

For the year ended 31 March 2016 (audited)

	Share Capital £'000	Share premium account £'000	Capital redemption reserve £'000	Share based payment reserve £'000	Revaluation Reserve £'000	Retained earnings £'000	Total equity £'000
Balance at 31 March 2015	843	-	-	486	87	13,338	14,754
Comprehensive income
Loss for the year	-	-	-	-	-	4,535	4,535
Revaluation of available-for-sale investments	-	-	-	-	(139)	-	(139)
Total comprehensive income	-	-	-	-	(139)	4,535	4,396
Transactions with owners
Purchase of own shares	(65)	-	65	-	-	(743)	(743)
Dividend paid						(529)	(529)
Share based payment debit for the period	-	-	-	(132)	-	-	(132)
Total transactions with owners	(65)	-	65	(132)	-	(1,272)	(1,404)
Balance at 31 March 2016	778	-	65	354	(52)	16,601	17,746

 

1.      Basis of preparation and accounting policies

The condensed interim consolidated financial statements of the Company and its subsidiaries ("the Group") for the 6 months to 30 September 2016 ("the period") have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial information presented above does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006.

Copies of this announcement are available from the Company's registered office at 1a Kingsley Way, London N2 0FW and on its website, www.safeland.co.uk.

These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 March 2016. While the financial figures included within this interim report have been computed in accordance with IFRS applicable to interim periods, this report does not contain sufficient information to constitute an interim financial report as set out in International Accounting Standard 34 Interim Financial Reporting.

Revenue

Revenue is stated net of VAT and comprises rental income, proceeds from sales of trading properties, fees, commissions and other income.

Sales of trading properties are recognised on completion of a contract. This reflects the point of transfer of risk and rewards when trading property is sold.

Rental income from investment and trading properties leased out under operating leases is recognised in the Income Statement on a straight-line basis over the term of the lease. Contingent rents which comprise turnover rents are recognised as income in the periods in which they are earned. Rent reviews are recognised when such reviews have been agreed with tenants.

Revenue in the previous period arising from deferred consideration in the form of four completed houses in a residential development to be undertaken on the site of the Chandos Tennis Club in the following three years is based on a valuation by the directors, discounted to a present-day value using the weighted average cost of capital.

Other fees in relation to property management are recognised on a straight-line basis over the term of management contracts.

Hotel revenue comprises revenues from overnight hotel accommodation, banqueting facility hire and sales of food and beverages. All revenues are recognised when the service is provided.

Freehold property

Freehold property is stated at cost less accumulated depreciation and is depreciated at 2% per annum on a straight-line basis, pro-rated in the year of acquisition.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and are depreciated over their estimated useful lives on the following annual bases:

Motor vehicles                                                 25% (reducing balance)

Fixtures, fittings and equipment             20% (reducing balance)

Investment properties

Investment properties are those properties that are held either to earn rental income or for capital appreciation or both. Investment properties are measured and stated at fair value in the statement of financial position. Valuation surpluses and deficits arising in the period are included in profit or loss.

The gain or loss arising on the disposal of a property is determined as the difference between the sales proceeds and the fair value of the asset at the beginning of the period and is recognised in the income statement.

Investment properties may be freehold properties or leasehold properties. For leasehold properties that are classified as investment properties, the associated leasehold obligations, if material, are accounted for as finance lease obligations.

Trading properties

Properties held for development and resale are classified as trading properties and are shown at the lower of cost and net realisable value. Cost comprises purchase price, acquisition costs and direct expenditure.

Restatement of stock as investment property

Triangle Estates Limited (TEL) was acquired by the Group on 19 December 2014. It was trading as an investment company on acquisition and in the opinion of the directors has continued to do so.

At 31 September 2015, the carrying value of the Group's trading properties included an amount of £1,970k that should have been classified as investment properties. This has now been restated for that period ended 31 September 2015 in the comparative figures.

This is further set out in more detail in notes 5 and 6 to these abbreviated interim financial statements.

 

2.      Earnings per share

	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
(Loss)/profit for the financial period attributable to owners of the parent company	(377)	3,413	4,535
	No	No	No
	'000	'000	'000
Weighted average number of ordinary shares for
the purposes of basic earnings per share	15.560	16,851	16,224
Effect of potential dilutive ordinary shares:
Share options	12,107	19,865	12,107
Weighted average number of ordinary shares for the purposes of diluted earnings per share	28,332	36,716	28,332

Diluted Earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares.  

3.      Dividends

No interim dividend has been declared. In the six months ended 30 September 2015, the Company paid an interim dividend of 1.5p per ordinary share. There was no final dividend in the year to 31 March 2016.

 

4.      Cash flows from operating activities

	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
(Loss)/profit before tax	(377)	4,279	6,057
Depreciation	71	48	85
Profit/(loss) on sale of property, plant and equipment	-	14	15
Loss/(profit) on sale of investment property	-	-	33
Loss/(gain) on revaluation of investment properties	-	-	(42)
Share of results of associate	(12)	(12)	(23)
Share of results of jointly controlled entity	-	-	(13)
Finance income	-	-	(1)
Unwinding of discount on deferred revenue	(274)	(256)	(519)
Finance costs	240	156	334
Share-based payments (credit)/charge	-	69	(132)
Changes in working capital
Decrease/(increase) in trading properties	374	3,064	(2,091)
Decrease/(increase) in trade and other receivables	264	(296)	(60)
(Decrease)/increase in trade and other payables	(210)	(637)	(1,322)
	76	6,429	2,321

 

5.      Investment properties

	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
		Restated  (ref  note 6)
Fair value
Start of the period	1,123	2,693	2,693
Disposals	-	-	(1,612)
Increase in fair value during the period	-	-	42
End of period	1,123	2,693	1,123

The fair value of the investment properties at 30 September 2016 comprises freehold properties of £665,000 (30 September 2015: £265,000 and 31 March 2016: £665,000) and long leasehold properties of £458,000 (30 September 2015: £458,000 and 31 March 2016: £458,000).

The directors do not consider the fair value of the Group's lease obligations associated with its long leasehold investment properties to be material to the financial statements. As a result, no finance lease obligations are included in the statement of financial position at 30 September 2016, 30 September 2015 or 31 March 2016.

The Group has pledged investment properties for resale with carrying value of £703,000 (30 September 2015: £703,000 and 31 March 2016: £703,000) to secure banking facilities granted to the Group.

6.      Trading properties                      

	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
		Restated  (ref  note 5)
Properties for resale	14,464	8,240	14,838

The Group has pledged trading properties for resale with carrying value of £14,464,000 (30 September 2015: £9,406,000 and 31 March 2015: £14,838,000) to secure banking facilities granted to the Group.

 

7.      Bank loans and overdrafts                       

	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
Bank Loans
Due within one year	-	-	-
Due in the second to fifth years	9,716	6,500	11,000
Unamortised borrowing costs	(52)	(115)	(73)
	9,664	6,385	10,927

There were no breaches in bank loan covenants as at 30 September 2016. All of the Group's bank loans and overdrafts disclosed above comprise borrowings in sterling. The bank loans are secured on properties owned by the Group.

8.      Share capital                  

	Unaudited	Unaudited	Audited
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2016	2015	2016
	£000	£000	£000
Authorised:
45,750,000 ordinary shares of 5p each	2,288	2,288	2,288
Allotted, called up and fully paid:
15,560,380 ordinary shares (30 September 2015: 16,851,180, 31 March 2016: 15,560,380)  of 5p each	778	843	778

 

END

 

 

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